Blow and Krugman

July 28, 2014

In “The Fight Over ‘Impeachment Lite’ ” Mr. Blow says as politics, House Republicans’ threat to sue the president may work best for Democrats.  Prof. Krugman, in “Corporate Artful Dodgers,” takes a look at a loophole so big whole companies can slip through.  Here’s Mr. Blow:

Rather than getting on with the country’s business and focusing solely on can’t-wait issues before they jet out of town this weekend — like the unfinished bill to fix veterans’ health care and the stalled bill to deal with the humanitarian crisis of Central American children arriving at the border — House Republicans are gearing up for a grand maneuver: an apparently unprecedented move by the House to sue the president over his use of executive orders.

Talk about misplaced priorities.

But this isn’t about the public’s priorities, not even close. This is about base-voter activation; this is about midterm turnout. The president’s most ardent opposition wants more punishing actions taken. There is an insatiable vengeance-lust for the haughty president who refuses to bend under pressure or fold under duress.

He must be brought to heel. He must be chastened. He must be broken. So, House Republicans are throwing the red meat into the cage.

Even Paul Ryan, fresh off his “Opportunity Grant” move to address poverty in this country — a plan that the Center on Budget and Policy Priorities said “would likely increase poverty and hardship” rather than decrease it — said Friday that he would vote for the measure to sue the president.

I’m not sure Ryan is aware that people making less than $30,000 a year voted for President Obama nearly two to one over his opponents in 2008 and 2012. Low-income people are President Obama’s people. You can’t make a show of supposedly extending them a hand one day and use that hand to take a slap at their political hero the next. Or maybe you can, if your sense of cognitive dissonance is strong enough.

The White House is returning in kind, picking up the language of the most extreme among the far right to invoke the word “impeachment.”

Dan Pfeiffer, the Obama administration senior adviser, said Friday, “I think Speaker Boehner, by going down the path of this lawsuit, has opened the door to impeachment sometime in the future.”

It should be noted that most senior Republican leaders are not clamoring for impeachment — and John Boehner has flatly ruled it out, for now — but the idea that a lawsuit is akin to “impeachment lite” is one Democrats would love to take hold for the same reason that the lawsuit exists in the first place: politics.

But the concept isn’t completely without underpinning. In a recent Los Angeles Times article titled “Why Experts See Little Hope for G.O.P. Plan to Sue Obama Over Law’s Delay,” David G. Savage pointed out: “While the Constitution does not authorize the legislative branch to sue the president, it says the House of Representatives may vote on articles of impeachment if it believes the president has committed ‘high crimes and misdemeanors.’ If Republicans believe Obama has broken the law, impeachment is the appropriate vehicle, analysts say.”

Adding an unprecedented legal maneuver to a long list of what Democrats view as extraordinary slights against this particular president is likely to excite a liberal base in dire need of excitement.

As a report by the Pew Research Center for the People and the Press pointed out: “Barack Obama is as powerful a motivating factor for Republican voters as he was in 2010: about half (51 percent) of those who say they will vote Republican this fall consider their vote as a vote ‘against’ Obama, little changed from June 2010 (52 percent). And Obama has become a less positive factor for Democrats — 36 percent of those who plan to vote for the Democrat in their district view their vote as being ‘for’ Obama, down from 44 percent four years ago.”

But the anti-Obama Republican lawsuit could change all that.

A CNN/ORC poll released Friday found that while 45 percent of respondents said they believed the president had gone too far in expanding the power of the presidency and the executive branch, 52 percent believed that he “has been about right” or “has not gone far enough.”

For comparison, in 2006, the sixth year of the George W. Bush administration, 48 percent believed that he had gone too far, while just as many thought he was about right or hadn’t gone far enough.

Furthermore, only 41 percent of Americans believe House Republicans should sue the president, as opposed to 57 percent who believe they shouldn’t.

And if you believe that the lawsuit is simply, as some have called it, “impeachment lite,” the public truly has no appetite for that. Respondents in the CNN/ORC poll opposed impeachment by nearly two to one.

This may all be political theater, but in this act Democrats appear to have the most compelling lines.

Now here’s Prof. Krugman:

In recent decisions, the conservative majority on the Supreme Court has made clear its view that corporations are people, with all the attendant rights. They are entitled to free speech, which in their case means spending lots of money to bend the political process to their ends. They are entitled to religious beliefs, including those that mean denying benefits to their workers. Up next, the right to bear arms?

There is, however, one big difference between corporate persons and the likes of you and me: On current trends, we’re heading toward a world in which only the human people pay taxes.

We’re not quite there yet: The federal government still gets a tenth of its revenue from corporate profits taxation. But it used to get a lot more — a third of revenue came from profits taxes in the early 1950s, a quarter or more well into the 1960s. Part of the decline since then reflects a fall in the tax rate, but mainly it reflects ever-more-aggressive corporate tax avoidance — avoidance that politicians have done little to prevent.

Which brings us to the tax-avoidance strategy du jour: “inversion.” This refers to a legal maneuver in which a company declares that its U.S. operations are owned by its foreign subsidiary, not the other way around, and uses this role reversal to shift reported profits out of American jurisdiction to someplace with a lower tax rate.

The most important thing to understand about inversion is that it does not in any meaningful sense involve American business “moving overseas.” Consider the case of Walgreen, the giant drugstore chain that, according to multiple reports, is on the verge of making itself legally Swiss. If the plan goes through, nothing about the business will change; your local pharmacy won’t close and reopen in Zurich. It will be a purely paper transaction — but it will deprive the U.S. government of several billion dollars in revenue that you, the taxpayer, will have to make up one way or another.

Does this mean President Obama is wrong to describe companies engaging in inversion as “corporate deserters”? Not really — they’re shirking their civic duty, and it doesn’t matter whether they literally move abroad or not. But apologists for inversion, who tend to claim that high taxes are driving businesses out of America, are indeed talking nonsense. These businesses aren’t moving production or jobs overseas — and they’re still earning their profits right here in the U.S.A. All they’re doing is dodging taxes on those profits.

And Congress could crack down on this tax dodge — it’s already illegal for a company to claim that its legal domicile is someplace where it has little real business, and tightening the criteria for declaring a company non-American could block many of the inversions now taking place. So is there any reason not to stop this gratuitous loss of revenue? No.

Opponents of a crackdown on inversion typically argue that instead of closing loopholes we should reform the whole system by which we tax profits, and maybe stop taxing profits altogether. They also tend to argue that taxing corporate profits hurts investment and job creation. But these are very bad arguments against ending the practice of inversion.

First of all, there are some good reasons to tax profits. In general, U.S. taxes favor unearned income from capital over earned income from wages; the corporate tax helps redress this imbalance. We could, in principle, maintain taxes on unearned income if we offset cuts in corporate taxes with substantially higher tax rates on income from capital gains and dividends — but this would be an imperfect fix, and in any case, given the state of our politics, this just isn’t going to happen.

Furthermore, ending profits taxation would greatly increase the power of corporate executives. Is this really something we want to do?

As for reforming the system: Yes, that would be a good idea. But the case for eventual reform basically has nothing to do with the case for closing the inversion loophole right now. After all, there are big debates about the shape of reform, debates that would take years to resolve even if we didn’t have a Republican Party that reliably opposes anything the president proposes, even if it was something Republicans were for just a few years ago. Why let corporations avoid paying their fair share for years, while we wait for the logjam to break?

Finally, none of this has anything to do with investment and job creation. If and when Walgreen changes its “citizenship,” it will get to keep more of its profits — but it will have no incentive to invest those extra profits in its U.S. operations.

So this should be easy. By all means let’s have a debate about how and how much to tax profits. Meanwhile, however, let’s close this outrageous loophole.

And because of earlier effups, FYWP.

Krugman’s blog, 7/26/14

July 27, 2014

There was one post yesterday, “Moore of the Same:”

A few months ago the buzz was that the Heritage Foundation was getting serious after a series of blatant errors and ludicrously biased “research”. The supposed evidence for this turn was the hiring of Stephen Moore from the Wall Street Journal to become chief economist. I was, shall we say, unimpressed.

Ahem. Conservative Media’s Favorite Economist Caught Distorting Facts About Taxes And Job Creation:

On July 7, Moore published an op-ed in The Kansas City Star attacking economic policies favored by Nobel Prize-winning economist Paul Krugman. The op-ed claimed that “places such as New York, Massachusetts, Illinois and California … are getting clobbered by tax-cutting states.” Moore went on to attack liberals for “cherry-picking a few events” in their arguments against major tax cuts, when in fact it was Moore who cited bad data to support his claims.

On July 24, The Kansas City Star published a correction to Moore’s op-ed, specifically stating that the author had “misstated job growth rates for four states and the time period covered.”

What gets me here is the sheer laziness; it looks as if Moore pulled numbers from an old piece of his, and never bothered to update. How hard is it to check state job numbers?

Actually, if you’re going to do something about state job growth, the very least you should do is bear in mind that the recession and recovery have had differential effects across states, so that you might want to look at job growth over the whole period of recession and recovery. If you do, the figure shows what you see for Moore’s four states:

Texas is, not surprisingly, the best performer. New York comes in second, followed by California, with Florida in last place. Not much of a clear ideological message there.

Nor should you expect there to be. Real empirical work on state growth shows multiple factors — mildness of climate, cheap housing, high wages, and yes, some impact from tax rates. The idea that you would find an overwhelming one-factor correlation with taxes alone is something only a, well, Heritage foundation analyst could believe.

Last point: there are quite a few politically conservative but technically competent economists out there, and Heritage clearly has the resources to hire them if it chooses. But it doesn’t — I suspect because it’s afraid that they might stray off the reservation. Competence has a well-known liberal bias.

The Pasty Little Putz, Dowd, Friedman and Kristof

July 27, 2014

The Pasty Little Putz has a question in “Up From Greenwich:” Can the G.O.P. stop being the party of the rich? Once my cats stopped laughing they pointed out what “mancuroc” from Rochester, NY had to say in the comments: “ ‘the Republicans could finally — and deservedly — shake their identity as a party that cares only about the rich.’ And the sun could rise in the west.” In “Angell in the Outfield” MoDo tells us that from Babe to Jeter, Roger Angell has taken his readers out to the old ballgame. This is the kind of writing she’s capable of, and I wish she’d do more of it. The Moustache of Wisdom asks “What Is News?” He tells us that Madagascar, one of the world’s greatest ecosystems, is on the edge. Mr. Kristof tells us about “The World’s Coolest Places.” He says if we’re looking for a summer escape here are some suggestions for adventure way beyond a scintillating beach read. Here’s The Putz:

When Barack Obama won the White House in 2008, he did so in an unusual way for a Democrat: As the candidate of the rich. He raised more in large-dollar donations than any of his rivals and raked in more cash from Wall Street than John McCain. In November, he won the upper class’s votes: By 52 percent to 46 percent, according to exit polls, Americans making more than $200,000 cast their ballots for Obama.

There were several reasons for this shift, some specific to 2008 (elite exhaustion with the Bush presidency, the power of Obamamania) and some reflecting deeper trends: The Republican Party’s post-1970s gains among white working-class voters; the Democratic Party’s post-1980s attempts to shed its anti-business reputation; the increasing cultural liberalism of the affluent; and the rise of the so-called “liberal rich.”

In the wake of Obama’s ’08 victory, these trends confronted Republicans with an interesting dilemma: Should they seek to actively win back the Aspen-Greenwich vote, or embrace their increasingly populist coalition and try to rebuild from the middle out?

Across the first Obama term, they mostly tried the first approach. There was an incredibly strong populist mood on the right — hence the Tea Party’s anti-Washington fervor, the rumblings against Wall Street from figures like Glenn Beck. But the populists marched into blind alleys on policy and rallied round never-gonna-happen standard bearers, while the mainstream of the party mostly stuck to a more generic script — job creators good, class warfare bad, you built that and now the 47 percent are living off your hard work …

Sure enough, in 2012, Mitt Romney won back the over-$200,000 vote, mostly by regaining ground in the suburbs around New York City. But what he didn’t win was the actual election, mostly because voters outside Greenwich and New Canaan decided that a G.O.P. obsessed with heroic entrepreneurs didn’t have their interests close to heart.

So haltingly at first, and then with increasing seriousness, Republicans began to look for a different path back to power — one tailored to the party’s growing dependence on working-class votes, and one designed to deliver populist substance as well as style.

Thus far they have circled around two broad approaches. One, dubbed “reform conservatism,” seeks to make the welfare state and tax code more friendly to work and child-rearing and upward mobility — through larger wage subsidies, bigger child tax credits, and a substantial clearing-out of the insider-friendly subsidies and tax breaks and regulations that drive up costs in health care, real estate, energy and higher education.

The other, “libertarian populism,” is even more zealous about attacking rent-seeking and crony capitalism, while also looking for other places — criminal justice reform, notably — where a libertarian approach to public policy might benefit people lower on the economic ladder.

These two approaches substantially overlap (with the main difference being a skepticism among the libertarians about targeting tax cuts and subsidies specifically to parents and the poor). And together, they provide the foundation on which a number of prominent Republicans — Mike Lee, Marco Rubio, Rand Paul — have built policy proposals over the last year.

Now that list includes Paul Ryan, who last week released a blueprint that folds together many of the strongest reformist and libertarian ideas: There’s a larger earned-income tax credit, proposed cuts to corporate welfare, a call for sentencing reform for nonviolent offenses, a critique of “regressive regulations” like licensing requirements, and much more.

This kind of agenda has a long way to go before we can call it the official Republican program. It could face opposition in 2016 from donors who were pretty happy with the Romney approach, and from activists who regard anything save deep austerity as a sellout to the left.

 But if the G.O.P. fully embraces the ideas its younger-generation leaders are pursuing, the Democrats could suddenly find themselves in a difficult spot. Liberals can theoretically outbid a limited-government populism, yes — but given the fiscal picture, they would need to raise taxes significantly to do so, alienating their own donors, the middle class or both. And the immediate liberal critique of Ryan’s new plan — that it’s too paternalistic, too focused on pushing welfare recipients to work — harkened back to debates that the Democratic Party used to lose.

Meanwhile, Obama-era liberalism has grown dangerously comfortable with big business-big government partnerships. It’s a bad sign when even the tribune of left-wing populism, Elizabeth Warren, feels obliged to defend, against libertarian populist attacks, an icon of crony capitalism like the Export-Import Bank.

So there’s a scenario — still unlikely, but much more plausible than a year ago — in which the pattern of 2012 could be reversed: A deepening association with big money and big business could suddenly become an albatross for Democrats, and the Republicans could finally — and deservedly — shake their identity as a party that cares only about the rich.

Oh, don’t you just hope and pray that’ll happen, Putzy…  Here’s MoDo:

 Roger Angell takes off his brown J. Press sports coat and blue cap, yanks out his hearing aids, stashes his cane, and sits down for a shave and haircut at Delta barbershop at 72nd and Lex., the same spot he’s patronized for 40 years. “I don’t see Henry Kissinger doing any interviews in a barbershop,” he says dryly.

The 93-year-old New Yorker writer has come down from his house in Maine to get spruced up for the Baseball Hall of Fame ceremony this weekend. The old man who has lovingly described so many young men playing the game is getting the sport’s highest writing honor, the J. G. Taylor Spink Award, unprecedented recognition for “a drop-in writer,” as he calls himself, whose leisurely deadlines prevented him from becoming a member of the Baseball Writers’ Association of America.

In 1962, he says, he took the advice of New Yorker editor William Shawn to try writing about something exotic, like baseball, describing Shawn’s red-cheeked excitement when Angell explained to him what a double play was.

Baseball writing was a part-time gig for Angell, who served for many years as the magazine’s fiction editor, following in the footsteps of his mother, Katharine Angell White, who left his father to marry her colleague E. B. White. When Angell moved into his mother’s old New Yorker office, he chuckles, his shrink called it the “biggest single act of sublimation in my experience.”

The lover of books and words — who else would use “venery” in a story and write the world’s longest palindrome? — crisply shepherded John Updike, Donald Barthelme and William Trevor, as he himself became so luminous that Sports Illustrated compared him to Willie Mays, the player Angell calls so thrilling he “took your breath away.” It’s refreshing that a sport that has become tarnished by the desire to amp itself up — on steroids, merchandise and video — should honor someone so unamped.

In person, the writer is less “Angellic” — the adjective coined to describe his beguiling writing — than astringent. He has spent most of a century, from Ruth to Jeter, passionately tracking the sport as a fan, but he also proclaims himself a “foe of goo.” He much prefers the sexy “Bull Durham” to the sentimental “Field of Dreams.” He sniffs at being called “the poet laureate of baseball” and winces at a recent reverential Sports Illustrated profile. “It made me sound like the Dalai Lama,” he says. “My God, I’m just a guy who happened to live on for a long time. I’d rather be younger and writing than all this stuff.”

When I ask him if the Jacques Barzun quote “Whoever wants to know the heart and mind of America had better learn baseball” was outmoded, he scoffs: “I didn’t write about baseball because I was looking for the heart and soul of America. I don’t care if baseball is the national pastime or not. The thing about baseball is, it’s probably the hardest game to play. The greatest hitters are only succeeding a third of the time. If you take a great athlete who’s never played baseball and put him in the infield, he’s lost.”

Many in our A.D.D. nation may find baseball soporific now, but not Angell.

“Baseball is linear — it’s like writing,” he says. “In other sports, there’s a lot going on at the same time. You can’t quite take it all in.”

Could soccer ever take over as the national pastime? “I don’t know,” he replied. “I felt I was being waterboarded by The New York Times with the World Cup.”

Do American men focus as much on baseball? “Baseball used to be really attractive for men because the guys that played it were normal size, they had winter jobs as truck drivers or beer salesmen,” he said. “So it was easy to think with a little bit of luck that could have been me. Now the athletes are clearly so much bigger and stronger and vastly more talented.”

Should steroid-tainted players be in the Hall of Fame?

“Barry Bonds belongs in the Hall of Fame,” he said, expressing sympathy for players who get worn down playing every day. “There’s been a lot of cheating, if you want to call it that, particularly about home runs,” he said. “If Ted Williams had had a short right field in Fenway Park, he would have been much better than Babe Ruth, probably.”

We drop by a Ralph Lauren store. He wants to buy a cotton sweater for Cooperstown but doesn’t see anything he likes. “It’s hard to be old and shop,” he says. “The sales staff is probably terrified that I’m changing the age demographic. And I’m no longer sure what I want.”

He said the instructions for Cooperstown were “like D-Day,” but noted mordantly, “Anything I do is O.K. because they’ll say, ‘He’s old. What do you expect? He’s 93. He’s hopeless.’ ”

He wrote a swell New Yorker story about the vicissitudes of old age, talking about how he memorizes poems and writes blogs to stay sharp.

Most surprising, the widower — his beloved wife, Carol, died two years ago — extolled the virtues of sunset sexuality, ratifying Laurence Olivier’s line “Inside, we’re all 17, with red lips.”

He asked me to mention his “fiancée and closest companion, Peggy Moorman,” adding, “Everybody has been so weepy about me and Carol, but Peggy looks after me and is the center of my life.” As he wrote in “This Old Man,” “I believe that everyone in the world wants to be with someone else tonight, together in the dark, with the sweet warmth of a hip or a foot or a bare expanse of shoulder within reach.”

At least somebody around here knows how to play this game.

Next up we’re faced with The Moustache of Wisdom, writing from Fort-Dauphin, Madagascar:

With the world going crazy, I tried running away from the news. It didn’t work.

I’ve been doing an eco-survey of Madagascar, the island nation off the east coast of Africa that contains the highest percentage of plant and animal species found nowhere else on earth — all of them now endangered to one degree or another. My tour guide is Russ Mittermeier, the president of Conservation International and one of the world’s leading primatologists. We saw something the other day that even Mittermeier, who’s been coming here for 30 years, hadn’t seen before. We were trekking through the Berenty Reserve, one of the last remaining slices of Madagascar’s southern spiny desert, an ecosystem characterized by tall, thin, cactus-like plants exclusive to Madagascar. This forest is home to Sifaka lemurs: white, fluffy primates, with very long hind limbs that enable them to bound from tree to tree like forest kangaroos. How these lemurs are able to leap from one sharply spiked vertical tree to another without impaling themselves is a mystery.

After walking through the forest for hours, spotting a lemur here and there, we came upon a particularly dense grove and looked up. There, about 30 feet off the forest floor, were nine Sifaka lemurs huddling together for warmth in two groups — four on one limb, five on another — staring directly down at us. They looked as if they were drawn there by a Disney artist: too cute, too white, too fluffy to be other than the products of a toy factory. “I’ve seen two or three huddled together,” said Mittermeier later that night, “but I’ve never seen a whole group like that. I could have taken a whole chip full of pictures. I didn’t want to leave.”

None of us did. But it wasn’t just because we’d never seen such a thing before. It was because we knew we may never see such a thing again — that no one would, particularly our kids. Why? Just look at the trends: Madagascar has already lost more than 90 percent of its natural vegetation through deforestation, most of it over the last century, particularly the past few decades, said Mittermeier. “What remains is heavily fragmented and insufficiently protected, despite the fact that Madagascar has an essential national network of parks and reserves.”

And that brings me to the question: What is news?

I’ve visited and written a lot about Ukraine and the Middle East lately. The tragic events happening there are real news, worthy of world attention. But where we in the news media fall down is in covering the big trends — trends that on any given day don’t amount to much but over time could be vastly more significant than we can now imagine.

Too bad we’ll never see this news story: “The U.N. Security Council met today in emergency session to discuss the fact that Madagascar, one the world’s most biodiversity-rich nations, lost another percentage of its plant and animal species.” Or this: “Secretary of State John Kerry today broke off his vacation and rushed to Madagascar to try to negotiate a cease-fire between the loggers, poachers, miners and farmers threatening to devour the last fragments of Madagascar’s unique forests and the tiny group of dedicated local environmentalists trying to protect them.”

Because that won’t happen, we have to think about how this one-of-a-kind natural world can be protected with the limited resources here. We know the answer in theory — a well-managed national system of parks and reserves is vital because, given the current trends, anything outside such protected zones would be devoured by development and population growth. For Madagascar, this is particularly vital because, without its forests, neither its amazing plants nor animals will survive — which are a joy unto themselves and also attract critical tourist income for this incredibly poor country — and the people won’t survive either. These forests maintain the clean and sustainable water supplies and soils that Madagascar’s exploding population requires.

“We have to preserve this natural environment,” Hery Rajaonarimampianina, Madagascar’s president, told me in an interview. “One of my major policies is to develop eco-tourism. This can bring a lot of jobs. The problem is the poverty of the people that lead them to destroy the environment. That is very sad.”

Madagascar’s ecological challenge parallel’s the Middle East’s political challenge. The struggle here is all about preserving Madagascar’s natural diversity so its people will have the resilience, tools and options to ensure a decent future. A diverse system in nature is much more resilient and adaptable to change. Monocultures are enormously susceptible to disease. They can be wiped out by a single pest or weather event in a way that a poly-culture cannot.

In the Middle East today, though, the last remnants of poly-cultural nation states and communities are being wiped out. Christians are fleeing the Arab-Muslim world. Islamist jihadists in Syria and Iraq are beheading those who won’t convert to their puritanical Islam. Jews and Palestinians, Shiites and Sunnis keep forcing each other into tighter and tighter ghettos. So a human rain forest once rich with ethnic and religious diversity is becoming a collection of disconnected monocultures, enormously susceptible to disease — diseased ideas.

And now here’s Mr. Kristof:

Travel season is here, when so many Americans decamp to Cape Cod or the Jersey Shore. All of which is wonderful, and some day I plan to do a 10-part series on the world’s best beaches.

But travel can also be an education, a step toward empathy and international understanding. So for those with an adventurous streak who want to get beyond the madding crowd this summer, here are a few little-known travel spots that I recommend.

These just might be the world’s coolest places.

Bikini Atoll, Marshall Islands. This coral island in the Pacific Ocean was the site of American nuclear weapons tests in the 1940s and 1950s, but after decades left to itself it is now dazzlingly beautiful in a way that belies its history. Radiation has dissipated, and the deserted white-sand beaches are lined with coconut palms and scattered with seashells and an occasional giant sea turtle — which will hurriedly call to its friends: Look, there’s a rare sight, a human! The island is a reminder of the redemptive power of time and nature.

Potosí, Bolivia. Perhaps no country in Latin America is more picturesque than Bolivia, and the most memorable Bolivian city may be Potosí. European explorers discovered a huge silver mountain here in the 1540s, and, in the 1600s, this was one of the major cities in the world. Tourists can descend the silver mines, and it is a searing and unforgettable experience. You go down hundreds of feet in tiny, sweltering tunnels thick with dust, talk to some of the miners, and get a glimpse of what life is like for the many Bolivians who work each day in the mines. After a couple of hours deep underground, sometimes struggling to breathe and fretting about cave-ins, you may have new empathy for the laborers responsible for silver bowls and cutlery.

Victoria Falls, Zimbabwe. Maybe our best family trip started at Victoria Falls, which drenches you with spray and is so vast that it makes Niagara Falls seem like a backyard creek. Then we rented a car and made our way to Hwange National Park, which was empty of people but crowded with zebras, giraffes, elephants and more. Zimbabwe has far fewer tourists than South Africa or Kenya, and there’s less crime as well.

Amritsar, India. The Golden Temple, Sikhism’s holiest shrine, is in northwestern India near the Pakistani border, and it is a delightful place to contemplate the draw of faith. A four-century-old temple set in a lake, it attracts Sikhs from around the world. It is much less visited by tourists than the Taj Mahal, yet it is just as serene, grand and unforgettable. You walk the circuit of the lake barefoot, with your head covered, and, for the full experience, you can sleep and eat in temple buildings.

Tanna, Vanuatu. This remote island in the South Pacific is notable for its live volcano that you can climb at night. From the lip, you look down and see the fires and molten lava. It’s a natural fireworks display. The people of Tanna are also likely to invite you to drink kava, the local intoxicant, or perhaps join a village dance. The local faith tradition is a cargo cult. People believe in a god they call John Frum, perhaps based on an American military officer around the time of World War II who gave islanders their first glimpse of industrial products. One theory is that he introduced himself as “John from America,” but only the first two words survived and became his name.

Cu Chi Tunnels, Vietnam. Follow a guide in wriggling on your stomach underground through these tunnels dug by Vietcong soldiers who used them and even lived in them during the Vietnam War. The tunnels are now widened to accommodate portly Americans, and they are still a tight fit. After a couple hundred feet of crawling in the tunnels, you’re desperate to come up again, and you understand that military victory is sometimes not about weaponry but about commitment.

There’s nothing wrong, of course, with a delicious week at the beach with a pile of books. But if you’re hankering to escape the crowds this summer, encounter new worlds and come back with a tale, think about some of these destinations. The tourism infrastructure may not be great, but the people (or elephants) will make up for it.

When I visited the Pacific island country of Kiribati years ago, I made a reservation by phone to make sure I would have a place to stay. The man at the hotel agreed to hold me a spot, but he skipped the details.

“I don’t need the name,” he said. “If there’s an American at the airport, I’ll recognize him.”

Krugman’s blog, 7/25/14

July 26, 2014

There were three posts yesterday.  The first was “Ezra Klein Asks the Wrong Question:”

He asks, Why should anyone trust Paul Ryan’s poverty plan? That’s easy: nobody should. This has been another edition of simple answers to simple questions.

In case you want the longer answer, however, there are multiple reasons to distrust Ryan. It’s not just that this plan is completely inconsistent with his budget proposals, and that he has given no indication of how he would resolve this inconsistency. It’s not just that the methods he proposes, especially block-granting, have in the past simply been back-door ways to slash aid to the poor — which is what his budgets involve, after all. And it’s not just that everything he has said about the causes of and cures for poverty is all wrong.

No, it’s also the fact that Ryan’s previous proposals — all of them — were con jobs. It’s four years since he was challenged to explain the magic asterisk in his original budget proposal — how he could slash tax rates for the wealthy and corporations without reducing revenue. He has never explained it; all he’s done is put in more magic asterisks on discretionary spending and more.

So the question isn’t why or even whether you should trust him — you shouldn’t, period.

No, the real question is why so many people in the news media still want to find reasons to praise this con man. Of course, the answer has been clear for years: people are still trying

to slot Ryan into a role someone is supposed to be playing in their political play, that of the thoughtful, serious conservative wonk

He has never given any sign of actually fitting that role — but there’s nobody else out there, and so he keeps being given the benefit of the doubt no matter how many times he gets caught in the same old con.

Yesterday’s second post was “The End of the Cringe:”

Doug Sosnik has an interesting piece in Politico on how “the left” is taking over the Democratic Party. Of course, what he calls “left” would be centrist, maybe even right of center, in most other Western democracies; and I think it’s still true that today’s progressive icons — say, Elizabeth Warren — are to the right of where old-line liberals like Teddy Kennedy were.

But Sosnik is right that there has been a pretty big change in the way things feel. Here’s how I’d put it: Democrats have lost their post-Reagan cringe.

For a long time, it wasn’t just Republicans who believed that history was on their side; a lot of Democrats seemed to feel the same. There was an old cartoon from the 80s showing Democrats laying out their new platform — tax cuts for the rich, benefit cuts for the poor, and strong defense. When asked how this differed from the Republicans, the answer was “Compassion: we care about the victims of our policies.”

But things have changed, for the reasons Sosnik describes and more. Democrats have, after all, won the popular presidential vote in five of the past six elections. Despite all the craziness and challenges, they have made big progress on their generations-long quest for universal health insurance. They have a network of think tanks that is a lot less lavishly funded than the right-wing apparatus, but intellectually runs rings around its opponents.

And as Sosnik says more or less clearly, the craziness of the right in some ways empowers the moderate left. Time was when “centrist” Democrats would in effect urge appeasement: don’t talk about inequality or say nasty things about privatization, or the right will get mad. But now it’s clear that no matter what you do, short of destroying the entire legacy of the New Deal, the mere fact of being a Democrat will bring accusations that you’re an atheist Islamic communist. So why not stand up for some liberal principles?

A Republican wave election this year — not just a narrow win in the Senate with a very favorable map, but a drastic shift of the map — could bring back the cringe, I guess. But that’s looking less likely with each passing week, and in 2016 the map will favor Democrats.

How it all turns out is anyone’s guess — maybe we eventually see a California scenario on a national basis, with the growing diversity of the electorate and the evident madness of the right delivering an overwhelming Democratic majority; maybe we see some exogenous event tip the balance back to the GOP despite what looks like a trend the other way. But what I don’t think we’ll see, even if there’s a Clinton in the White House, is another Clinton era in which liberalism is afraid to take a stand.

He ended the work week with “Friday Night Music: Hotel California:”

For obvious reasons. Also, still pretty great:

 

Nocera, solo

July 26, 2014

Ms. Collins is off today, so Mr. Nocera has the place to himself.  In “Chamber of Commerce Lost Its Way in Right Turn” he says the U.S. Chamber of Commerce is regretting its one-sided support of Republicans.  Here he is:

Twice a year, the U.S. Chamber of Commerce convenes what it calls its Committee of 100 — which is composed of heads of regional chambers and Washington trade associations. They hear about the business climate from the chamber’s longtime president, Thomas J. Donohue, and about the political landscape from Bruce Josten, its chief lobbyist.

In the summer of 2012, a few months before the elections, the bulk of the meeting, according to people who were there, was devoted to one subject: the importance of electing Republicans. The Chamber of Commerce — which once supported its share of pro-business Democrats — went almost completely to the Republican side, spending millions to oppose such Democratic senatorial candidates as Elizabeth Warren of Massachusetts; Senator Sherrod Brown of Ohio, who was up for re-election; and former Gov. Tim Kaine of Virginia. It ran ads against Senator Claire McCaskill, a Democrat from Missouri who often took pro-business positions, accusing her of being anti-jobs because she supported the Affordable Care Act.

The chamber had done much the same thing during the 2010 midterms, with great success, helping to hand the House of Representatives to the Republicans, thanks largely to the influx of Tea Party freshmen. Now, said the chamber brass, it was time to finish the job and give the country a Republican Senate as well.

As it turns out, the 2012 strategy was a flop. According to The Washington Post, the chamber’s candidates lost in 13 of the 15 Senate races it poured money into. On the House side, the chamber went four for 22. Thus did the chamber find itself in the worst of all worlds. It had alienated Democrats, including the kind of pro-business Democrats who believe in the sort of practical politics that business prefers. Yet it had also helped usher in the Tea Party, only to discover that its strain of right-wing populism was as disdainful of business as it was of government.

What brings this to mind is the continuing fight over the Export-Import Bank. It is the classic kind of issue that used to unite the Republican Party and the Chamber of Commerce, pre-Tea Party: backing a government agency that supports trade by helping to finance deals that involve American exports. That is also the kind of issue that is anathema to Tea Party ideologues, who view it as corporate welfare. The chamber has vowed a “full-court press” to save the Ex-Im Bank, but so far at least, the House is indifferent to its entreaties.

And it’s not just the Ex-Im Bank. As Edward Luce noted this week in The Financial Times, this Congress won’t countenance any of the things that business — and the chamber — care about. Immigration reform is dead. Congress won’t raise the gas tax to fund the Highway Trust Fund. Revamping the corporate tax rate can’t even get a hearing. And on, and on.

It is possible that the chamber didn’t quite realize what it was getting when it helped elect those Tea Party freshmen in 2010 — few people did until they began to flex their muscles. But it is equally possible that it didn’t care.  (“The chamber is not an arm of either party and is not ‘aligned’ with either party,” a spokesman told me in an email.)

In the 16 years he has run the Chamber of Commerce, Donohue has turned it into a potent force, in no small part by making it more partisan. But by being so blindly pro-Republican, the chamber “unleashed a Frankenstein that has spun out of control,” said Robert Weissman, the president of Public Citizen, which monitors the Chamber of Commerce. That became most clear during the debt ceiling and deficit fights of the last few years — when the Tea Party Republicans seemed so determined to shrink government that they were even willing to default on the government’s debt. The chamber reacted in horror.

I’m told that after the 2012 election, at yet another Committee of 100 gathering, a former Democratic congressman, Dave McCurdy, who now runs the American Gas Association, stood up and criticized Donohue for his “all-in” Republican strategy. He told Donohue that everybody in the room was pro-business, but they weren’t all Republicans, and that if the chamber really wanted to be effective again, it needed to take on the Tea Party and the right wing of the Republican Party in favor of more moderate candidates of both parties.

As the 2014 midterms near, that seems to be the approach the Chamber of Commerce is taking. It has gotten involved in Republican primaries, siding with the more moderate Republican in a race — though perhaps it is more accurate to say the less radical Republican. At the most recent Committee of 100 meeting, Rob Engstrom, the chamber’s national political director, told the group that the chamber planned to support Mary Landrieu, the Louisiana Democrat who is running for re-election to the Senate.

Better late than never.

Cohen and Krugman

July 25, 2014

In “Hope in the Abattoir” Mr. Cohen points out that the peoples of the Holy Land are condemned to each other. Realizing that is their only way forward.  Prof. Krugman, in “Left Coast Rising,” says there are lessons for the rest of us in the good news from California.  Here’s Mr. Cohen:

Freight cars full of bodies shot out of the sky make their way across Europe. After more than two weeks of fighting in Gaza, at least 150 Palestinian children are dead, according to the United Nations. Thousands of Hamas rockets have hit Israel, and 32 young Israeli soldiers have been killed fighting to end this terror. As the poet Seamus Heaney observed, “It is difficult at times to repress the thought that history is about as instructive as an abattoir.”

When children die in these numbers, when the legitimate claim of the Jewish people to a sliver of earth is again contested, when the shrieking cacophony of each side declaiming its “truths” overwhelms, human progress seems a fickle fantasy. Truth, even before social media, was always the first victim of war.

Yet, against all evidence, people hope. They seek justice. It is in their nature.

Hamas establishes a stranglehold over 1.8 million Palestinians squeezed into what David Cameron, the British prime minister, once called the “open-air prison” of Gaza. It is a Jew-hating organization. It is ready, when need be, to use the lives of its own people as pawns. It pours concrete into a maze of tunnels rather than schools. Isolated before the latest violence, it revives by demonstrating a measure of military command and control, by hurting Israel, by appearing resolute as Mahmoud Abbas, the president of the Palestinian Authority in the West Bank, wavers.

The demands of this reconstituted Hamas become the demands of the Palestinian people. Abbas is marginalized. This is not a strategic victory for Israel.

Benjamin Netanyahu, the Israeli prime minister, pursues a status-quo strategy that keeps Palestinians divided and Israel dominant. The price of the strategy is periodic violence. This is the third Gaza mini-war in six years. An oppressed people will rise up. That is in the nature of things.

Some decades ago, Netanyahu denounced the efforts of Prime Minister Yitzhak Rabin to reach peace with the Palestinians through the Oslo Accords. Rabin, who had once vowed to “break the bones” of Palestinians, sought peace not because he had changed his view of the enemy but because he saw no alternative. Like the men responsible for Israel’s security interviewed in the movie “The Gatekeepers,” he had concluded that endless dominion over another people was unsustainable and incompatible with the preservation of a Jewish and democratic state. Netanyahu compared Rabin to Neville Chamberlain. Rabin’s widow never forgave him.

This month, Netanyahu said that rockets from Gaza demonstrated how critical it was that “we don’t get another Gaza in Judea and Samaria” — the West Bank. He declared: “I think the Israeli people understand now what I always say: that there cannot be a situation, under any agreement, in which we relinquish security control of the territory west of the river Jordan.”

As David Horovitz observed in The Times of Israel, “That sentence, quite simply, spells the end to the notion of Netanyahu consenting to the establishment of a Palestinian state.”

After the suspension of some flights into Tel Aviv’s Ben Gurion airport due to Hamas rockets, Netanyahu’s stance is immeasurably reinforced.

Inherent in Israeli policy are the eruptions of violence that in turn justify the policy that in turn spurs further violence. Vile Hamas revives itself. Palestinian statehood recedes.

Yet, people, in their majority, hope.

Netanyahu wants a majority Jewish state in the Holy Land. Abbas wants an end to the occupation, freedom and statehood for the Palestinians. Those two objectives are not mutually exclusive. In significant ways they are complementary. But they involve sacrifice of cherished national ambitions.

Two impossible things happened in my lifetime. My parents’ South Africa ended apartheid without the bloodbath I’d heard was coming throughout my youth. Europe’s division at the Berlin Wall dissolved, allowing freedom to spread eastward (if not quite far enough yet to spare those corpses in freight cars).

Sydney Kentridge, a classmate of my father’s in Johannesburg and a lawyer for Nelson Mandela, once told me that he concluded at the 1956 treason trial that one day “both sides would realize that neither could win.”

He was right. Hope is not always irrational.

On a recent visit to Israel, I passed through the Damascus Gate into Jerusalem’s Old City. Palestinians emerging from Al Aqsa Mosque moved toward me in a vast throng. They ran straight into a group of ultra-Orthodox Jews headed toward the Western Wall, and at that moment, out of the Via Dolorosa, a crowd of Philippine Christians emerged, carrying a heavy wooden crucifix. It was an impossible scene, funny even: the three great monotheistic religions jostling in the alley, no way around each other.

Nobody is going away. The peoples of the Holy Land are condemned to each other. Without that realization, any truce, even any demilitarization of Gaza, will only be a way station to the next round of slaughter.

That’s the likely but not inevitable scenario. Impossible things do happen.

Now here’s Prof. Krugman:

The states, Justice Brandeis famously pointed out, are the laboratories of democracy. And it’s still true. For example, one reason we knew or should have known that Obamacare was workable was the post-2006 success of Romneycare in Massachusetts. More recently, Kansas went all-in on supply-side economics, slashing taxes on the affluent in the belief that this would spark a huge boom; the boom didn’t happen, but the budget deficit exploded, offering an object lesson to those willing to learn from experience.

And there’s an even bigger if less drastic experiment under way in the opposite direction. California has long suffered from political paralysis, with budget rules that allowed an increasingly extreme Republican minority to hamstring a Democratic majority; when the state’s housing bubble burst, it plunged into fiscal crisis. In 2012, however, Democratic dominance finally became strong enough to overcome the paralysis, and Gov. Jerry Brown was able to push through a modestly liberal agenda of higher taxes, spending increases and a rise in the minimum wage. California also moved enthusiastically to implement Obamacare.

I guess we’re not in Kansas anymore. (Sorry, I couldn’t help myself.)

Needless to say, conservatives predicted doom. A representative reaction: Daniel J. Mitchell of the Cato Institute declared that by voting for Proposition 30, which authorized those tax increases, “the looters and moochers of the Golden State” (yes, they really do think they’re living in an Ayn Rand novel) were committing “economic suicide.” Meanwhile, Avik Roy of the Manhattan Institute and Forbes claimed that California residents were about to face a “rate shock” that would more than double health insurance premiums.

What has actually happened? There is, I’m sorry to say, no sign of the promised catastrophe.

If tax increases are causing a major flight of jobs from California, you can’t see it in the job numbers. Employment is up 3.6 percent in the past 18 months, compared with a national average of 2.8 percent; at this point, California’s share of national employment, which was hit hard by the bursting of the state’s enormous housing bubble, is back to pre-recession levels.

On health care, some people — basically healthy young men who were getting inexpensive insurance on the individual market and were too affluent to receive subsidies — did face premium increases, which we always knew would happen. Over all, however, the costs of health reform came in below expectations, while enrollment came in well above — more than triple initial predictions in the San Francisco area. A recent survey by the Commonwealth Fund suggests that California has already cut the percentage of its residents without health insurance in half. What’s more, all indications are that further progress is in the pipeline, with more insurance companies entering the marketplace for next year.

And, yes, the budget is back in surplus.

Has there been any soul-searching among the prophets of California doom, asking why they were so wrong? Not that I’m aware of. Instead, I’ve been seeing many attempts to devalue the good news from California by pointing out that the state’s job growth still lags that of Texas, which is true, and claiming that this difference is driven by differential tax rates, which isn’t.

For the big difference between the two states, aside from the size of the oil and gas sector, isn’t tax rates. it’s housing prices. Despite the bursting of the bubble, home values in California are still double the national average, while in Texas they’re 30 percent below that average. So a lot more people are moving to Texas even though wages and productivity are lower than they are in California.

And while some of this difference in housing prices reflects geography and population density — Houston is still spreading out, while Los Angeles, hemmed in by mountains, has reached its natural limits — it also reflects California’s highly restrictive land-use policies, mostly imposed by local governments rather than the state. As Harvard’s Edward Glaeser has pointed out, there is some truth to the claim that states like Texas are growing fast thanks to their anti-regulation attitude, “but the usual argument focuses on the wrong regulations.” And taxes aren’t important at all.

So what do we learn from the California comeback? Mainly, that you should take anti-government propaganda with large helpings of salt. Tax increases aren’t economic suicide; sometimes they’re a useful way to pay for things we need. Government programs, like Obamacare, can work if the people running them want them to work, and if they aren’t sabotaged from the right. In other words, California’s success is a demonstration that the extremist ideology still dominating much of American politics is nonsense.

Krugman’s blog, 7/23/14

July 24, 2014

There was one post yesterday, “How’s California Doing?”:

The states, said Louis Brandeis, are the laboratories of democracy — although that may not work as well as it used to now that the “I’m not a scientist” wing has taken complete control of the GOP. Still, state experiences can tell the rest of us something. There’s been a lot of talk lately about how the great Kansas tax-cut experiment is doing, namely very badly. But what about the anti-Kansas — California? It’s a state with a Democratic supermajority. Its policies aren’t left-wing in the way Kansas’s are right-wing, but it’s enough of a liberal agenda to have the right frothing at the mouth. So how is it going?

I wrote about the California comeback more than a year ago, to much vitriolic scorn from the usual suspects. But how’s it going now?

Well, David Cay Johnston tells us that job growth remains fast despite predictions of doom from tax hikes. I found myself wondering, however, whether this was just bounceback from an especially severe slump — after all, California was a major housing bubble state, suffered for it, and you would expect a period of relatively fast growth thereafter even if overall performance was lagging the nation.

If you look at the numbers, however, what you see is that while fast job growth has indeed largely reflected recovery from an especially deep slump, at this point California’s performance (blue) since the Great Recession began has fully matched that of the nation (red); that is, there is no sign of growth being hurt by liberal policies or whatever:

Meanwhile, the budget is in good shape, with room for some much-needed spending increases.

Oh, and California — which enthusiastically went about implementing health reform — appears to have cut the number of uninsured by half in the first year of Obamacare.

Is it a miracle? No — or at any rate not unless you consider any deviation from supply-side predictions miraculous. But it’s looking like a pretty solid record.

Blow and Kristof

July 24, 2014

Ms. Collins is off today.  Mr. Blow has a question in “Paul Ryan and His Poverty Prophet:”  Will a new conservative anti-poverty plan, however well-intended, just lead directly to the soup kitchen?  Charles, if ZEGS has anything to do with it that’s probably the desired result.  Mr. Kristof offers “An Idiot’s Guide to Inequality.”  He says if you don’t have time for Thomas Piketty’s comprehensive best seller, here’s a quick five-point take on the gap between the rich and poor.  Here’s Mr. Blow:

After being chastised early this year for proclaiming that there was a “tailspin of culture,” particularly among inner city men, of “not working and just generations of men not even thinking about working or learning the value and the culture of work,” Paul Ryan is going to take another swipe at an anti-poverty proposal.

According to The Wall Street Journal, Ryan will unveil a six-pronged anti-poverty plan — “including ways to address incarceration and education and to encourage employment” — Thursday at the American Enterprise Institute.

Bob Woodson, president of the Center for Neighborhood Enterprise, and a Ryan mentor, told The Journal, “He’s coming up with a new construct, and I’ve encouraged him.” Woodson continued:

“We cannot and should not generalize about poor people. There are the deserving poor and the undeserving poor. It used to be that way, and it became politically incorrect. We are returning to some of the old values that served people very effectively until the welfare reforms of the 1960s.”

Woodson’s comments mine familiar conservative rhetoric, hinting at welfare failure and abuse, pinning further harm on liberal intentions to help, while sidestepping altogether conservative callousness and Republican Party platforms that have sought for decades to reward those at the top of the economic ladder while ignoring those at the bottom.

Woodson is a smart man, a MacArthur genius fellow, and he’s made his work focus on the plight of the poor and troubled neighborhoods. But at the heart of his logic — if, indeed, there is heart in his logic — is a particular strand of tough-love, up-by-the-bootstraps, stop-helping-poor-folks-so-much-because-you’re-hurting-them thinking. Woodson isn’t a neutral arbiter, but a fiercely minimal-government partisan with an open disdain for the civil rights apparatus in this country.

In a RealClear Radio Hour interview in May, Woodson said of the current civil rights movement:

“It has really abandoned the high ground on which it was founded. It has morphed into a race grievance industry, and it’s been hijacked by the gay movement, it’s been hijacked by the Democratic Party. And so it has lost its authenticity.”

He continued: “The civil rights movement, again, has sold its soul to the highest bidder.”

Speaking about the president’s My Brother’s Keeper initiative, Woodson told The Wall Street Journal in April:

“My worry and my fear is that the money and resources will go to the same racial grievance groups, the same members of what I call the poverty Pentagon. They’ll give it to Al Sharpton and the others to do what they’ve been doing for decades, to do what doesn’t work — what in fact is making things worse.”

This idea, espoused by conservative-minded blacks, and aimed with suspicion at the motives of more politically activist blacks — the head-down-and-get-the-work-done crowd vs. the head-high-and-reach-for-the-stars crowd — goes back at least a century, possibly further.

In 1911, Booker T. Washington put it thusly:

“There is another class of coloured people who make a business of keeping the troubles, the wrongs, and the hardships of the Negro race before the public. Having learned that they are able to make a living out of their troubles, they have grown into the settled habit of advertising their wrongs — partly because they want sympathy and partly because it pays. Some of these people do not want the Negro to lose his grievances, because they do not want to lose their jobs.”

Decades earlier, in Washington’s 1895 “Atlanta Compromise” speech of racial appeasement, he beseeched blacks to “cast down your bucket where you are” for the purpose of “cultivating friendly relations with the Southern white man” and for whites to do the same “among the eight millions of Negroes whose habits you know, whose fidelity and love you have tested in days when to have proved treacherous meant the ruin of your firesides.” And he sought to assuage the audience by declaring: “The wisest among my race understand that the agitation of questions of social equality is the extremest folly, and that progress in the enjoyment of all the privileges that will come to us must be the result of severe and constant struggle rather than of artificial forcing.”

This is the kind of thinking from which Ryan’s poverty prophet springs.

According to The Washington Post, Ryan’s “new proposal, called an ‘Opportunity Grant,’ would begin on a pilot basis. It would consolidate a range of safety-net programs — from food stamps to housing vouchers — into a single grant offered to states.”

But, make no mistake: “opportunity” is the new “block.” And, block grants to states don’t have a great track record where poor people are concerned.

First, let’s set the stage: Some of the poorest states in the country consistently vote for Republican presidential candidates, have Republican governors and Republican control of the statehouses. Many of these are the same states that refused to expand Medicaid under the Affordable Care Act, which would have extended health care to more low-income Americans. What could possibly go wrong?

Second, let’s look at the evidence: According to a 2012 report by the Center on Budget and Policy Priorities, the replacement of the Aid to Families With Dependent Children program “with the Temporary Assistance for Needy Families (TANF) block grant under the 1996 welfare law” provides a “cautionary tale about the dangers of converting basic safety-net programs to block grants” because it makes “the cash assistance safety net for the nation’s poorest families with children” grow “weaker, not stronger.”

According to the center:

“In 1995, for every 100 families with children living in poverty, 68 received cash assistance through AFDC to help meet basic needs; by 2010, for every 100 families that were poor, only 27 families received such assistance. Moreover, for families still receiving cash assistance, median benefit levels have plummeted — falling 20 percent since TANF’s creation (after adjusting for inflation).”

We have to look beyond the catchphrase dance — poverty prophet, grievance industry, undeserving poor — and be reminded of the data. Ryan and Woodson may well come forth with a plan with good intentions, but a wider road to the soup kitchen may just as well be paved with those intentions.

Now here’s Mr. Kristof:

We may now have a new “most unread best seller of all time.”

Data from Amazon Kindles suggests that that honor may go to Thomas Piketty’s “Capital in the Twenty-First Century,” which reached No. 1 on the best-seller list this year. Jordan Ellenberg, a professor of mathematics at the University of Wisconsin, Madison, wrote in The Wall Street Journal that Piketty’s book seems to eclipse its rivals in losing readers: All five of the passages that readers on Kindle have highlighted most are in the first 26 pages of a tome that runs 685 pages.

The rush to purchase Piketty’s book suggested that Americans must have wanted to understand inequality. The apparent rush to put it down suggests that, well, we’re human.

So let me satisfy this demand with my own “Idiot’s Guide to Inequality.” Here are five points:

First, economic inequality has worsened significantly in the United States and some other countries. The richest 1 percent in the United States now own more wealth than the bottom 90 percent. Oxfam estimates that the richest 85 people in the world own half of all wealth.

The situation might be tolerable if a rising tide were lifting all boats. But it’s lifting mostly the yachts. In 2010, 93 percent of the additional income created in America went to the top 1 percent.

Second, inequality in America is destabilizing. Some inequality is essential to create incentives, but we seem to have reached the point where inequality actually becomes an impediment to economic growth.

Certainly, the nation grew more quickly in periods when we were more equal, including in the golden decades after World War II when growth was strong and inequality actually diminished. Likewise, a major research paper from the International Monetary Fund in April found that more equitable societies tend to enjoy more rapid economic growth.

Indeed, even Lloyd Blankfein, the chief executive of Goldman Sachs, warns that “too much … has gone to too few” and that inequality in America is now “very destabilizing.”

Inequality causes problems by creating fissures in societies, leaving those at the bottom feeling marginalized or disenfranchised. That has been a classic problem in “banana republic” countries in Latin America, and the United States now has a Gini coefficient (a standard measure of inequality) approaching some traditionally poor and dysfunctional Latin countries.

Third, disparities reflect not just the invisible hand of the market but also manipulation of markets. Joseph Stiglitz, the Nobel Prize-winning economist, wrote a terrific book two years ago, “The Price of Inequality,” which is a shorter and easier read than Piketty’s book. In it, he notes: “Much of America’s inequality is the result of market distortions, with incentives directed not at creating new wealth but at taking it from others.”

For example, financiers are wealthy partly because they’re highly educated and hardworking — and also because they’ve successfully lobbied for the carried interest tax loophole that lets their pay be taxed at much lower rates than other people’s.

Likewise, if you’re a pharmaceutical executive, one way to create profits is to generate new products. Another is to lobby Congress to bar the government’s Medicare program from bargaining for drug prices. That amounts to a $50 billion annual gift to pharmaceutical companies.

Fourth, inequality doesn’t necessarily even benefit the rich as much as we think. At some point, extra incomes don’t go to sate desires but to attempt to buy status through “positional goods” — like the hottest car on the block.

The problem is that there can only be one hottest car on the block. So the lawyer who buys a Porsche is foiled by the C.E.O. who buys a Ferrari, who in turn is foiled by the hedge fund manager who buys a Lamborghini. This arms race leaves these desires unsated; there’s still only one at the top of the heap.

Fifth, progressives probably talk too much about “inequality” and not enough about “opportunity.” Some voters are turned off by tirades about inequality because they say it connotes envy of the rich; there is more consensus on bringing everyone to the same starting line.

Unfortunately, equal opportunity is now a mirage. Indeed, researchers find that there is less economic mobility in America than in class-conscious Europe.

We know some of the tools, including job incentives and better schools, that can reduce this opportunity gap. But the United States is one of the few advanced countries that spends less educating the average poor child than the average rich one. As an escalator of mobility, the American education system is broken.

There’s still a great deal we don’t understand about inequality. But whether or not you read Piketty, there’s one overwhelming lesson you should be aware of: Inequality and lack of opportunity today constitute a national infirmity and vulnerability — and there are policy tools that can make a difference.

Krugman’s blog, 7/22/14

July 23, 2014

There was one post yesterday, “Debt Disaster Dead-Enders:”

I got some correspondence from people telling me to read Rob Portman’s op-ed in the WSJ, intended to refute the growing evidence that the budget deficit has been grossly overrated as an issue. And it is an interesting piece — it’s a very good illustration both of the desperate desire to see a debt crisis, and what happens when someone (Portman, or more likely the staffer who wrote it) tries to be a Very Serious Person without actually understanding the numbers or having followed any of the analysis.

One thing you need to know is that none of Portman’s numbers refer to the CBO‘s baseline scenario; instead they refer to a much more pessimistic alternate scenario. That’s something he should have shared with readers.

And what you should know about that alternate scenario is that well over half of the projected spending rise he complains about has nothing to do with entitlements; it’s about rising interest payments, because the alternate scenario both assumes that spending will be higher and revenue lower than in the baseline, and that nothing will be done to remedy this situation, so that debt grows without limit. Oh, and those interest payments greatly overstate the real burden of debt in a growing economy with inflation.

But the main thing that struck me was the policy recommendations, written as if he knows nothing about the ongoing discussion of these issues over the past decade and more.

Portman wants us to raise the Medicare and Social Security ages. But raising the Medicare age doesn’t save money, and the Social Security age is already on an upward track to 67 — while life expectancy at age 65 has risen very little for the bottom half of workers.

He also wants means-testing. But Social Security is already de facto means-tested, with a very nonlinear relationship of benefits to wages; meanwhile, means-testing Medicare would actually cost money, because it would force people into more expensive private insurance. Oh, and if you’re worried about the incentive effects of higher taxes, means-testing is actually a big source of disincentives — the highest effective marginal tax rates in America are on lower-income workers who lose benefits as their earnings increase.

For sure we need serious efforts to control health-care costs — which we seem to be getting in Medicare, but face relentless Republican demagoguery.

Finally, whenever someone warns about the supposedly unsupportable costs of entitlements decades into the future, you should ask why, exactly, it’s urgent that we solve that conjectural future problem now — and why it has any bearing at all on current fiscal issues. Don’t say that it’s obvious; it isn’t, and in fact deficit scolds bob and weave when confronted with that question.

But the deficit scolds do love their looming disaster, and they love making tough proposals that someone always involve sacrifices by the little people.

Oh, life is good!

July 23, 2014

God is in his heaven, and all is right with the world.  There is nothing to torture ourselves with this morning.  Both MoDo and The Moustache of Wisdom are off.  Happy days are here again…


Follow

Get every new post delivered to your Inbox.

Join 157 other followers